Recently, I’ve been looking at LSTs and re-staking again. To put it simply, the yield doesn’t just appear out of thin air: one part is the basic rewards from the underlying staking, and the other part mostly comes from the premium of “selling the same security safety again” (someone is willing to pay for safety/services). The issue is right here: the more the returns look like they’re “stacked,” the more the risks look stacked too—contract risk, liquidation, unpegging, and the correlation risks that come with re-staking. You usually don’t notice these in normal times, but when something really goes wrong, they could all fail at once.

A couple of days ago, that mainstream public chain was going to upgrade and maintain, and everyone in the group was speculating whether the ecosystem should migrate. I think this is exactly when you can see things more clearly: whether your so-called “steady returns” really rely on protocol rules, or whether they’re driven by market sentiment. In any case, I’m treating myself as a gardener pruning positions right now—keeping LSTs as a core holding, adding fewer layered layers. I’d rather earn a little less and sleep well.